On 31 August 2022, we added a new feature under Trading Preferences. Normally, clients can already choose between two types of trading methods: either the "Batch" method or the "Hedge" method. Now, clients can also set two new values when making use of the Batch method, namely:
- An Upper Limit
- A Lower Limit
The upper limit functions as a "Target Price" and the lower limit functions as a "Stop Loss". This means that, for example, you can set your upper limit to 1% and your lower limit to 0.2%, which would result in your trade automatically switching from the Batch method over to the Hedge method the moment your profit margin either goes over 1% or goes below 0.2%.
The benefits are as follows:
- If the Rand strengthens and causes your profit to drop to below 0.2%, then our system has the opportunity to switch you over to the Hedge option before it drops even further which may result in a loss.
- If the Rand weakens and causes your profit to rise to over 1%, then our system can lock in the deal before it potentially drops to a lower value.
Please do note:
- If your upper or lower limit is not hit and your funds arrive, then you will form part of the batch as normal. You will not be able to switch to Hedge once your funds have arrived.
- It is possible to switch from Batch to Hedge but not from Hedge to Batch. That is because we would have already executed the Hedge deal by the time you would attempt to switch to Batch.
- Setting these values are not guaranteed! Just because you set your target as 1%, does not mean it will reach it before the next day when the batch closes. Nor does it mean that if you set your stop loss to 0.2%, that it can't possibly lock in your profit seconds after a drop resulting in a loss.
- If you set your stop loss too high, it might be triggered too soon. Set it too low and it might still result in a loss. Use these tools wisely! If you are unsure, the safest route is to always remain on hedging as it exposes you to the least amount of Forex movement.